tv Nightly Business Report PBS September 8, 2010 6:36pm-6:49pm PDT
responsibility for the deadly disaster, but says it was a chain of events involving multiple companies that led to the accident. b.p. began its investigation immediately after the explosion and released the results today in a 200-page report. stephanie dhue has more. >> reporter: today's report says the problem started with a bad cement job that caused dangerous gases to leak into the well undetected. crew members misread tests and thought the well was under control, and didn't act until it was too late. the blowout preventer, which should have sealed the well, failed. b.p. took responsibility for its decisions on the rig, but also blamed halliburton for the cement job and rig operator transocean, which maintained the blowout preventer. transocean called b.p.'s report a "self-serving attempt to conceal... b.p.'s fatally flawed well design." b.p. says the well design is sound and consistent with other wells in the area. halliburton says it completed the well under b.p.'s specifications. it also says it's confident its contract with b.p. protects it
from lawsuits. the 50-person b.p. investigation team found no proof the company cut corners, but they suggested that b.p. look more broadly at what happened. this report won't be the last word. transocean is doing its own investigation. government agencies, including the coast guard and the justice department, have their own probes. there's also a presidential commission looking into what went wrong. stephanie dhue, "nightly business report," washington. >> tom: south florida is home to sunny skies, beautiful beaches... and it's also the epicenter of the nation's foreclosure crisis. the housing bust is putting the squeeze on south florida's taxpayers and the budgets of municipal governments. as we continue our "budget blues" series tonight, jeff yastine tells us how the lack of tax revenue means higher taxes and fewer services for people in the sunshine state. >> reporter: the human impact of the housing bust is well known-- unemployment, families uprooted,
and a steep decline in home prices. now, the financial impact is coming home to roost. south florida is home to many examples, like the city of miami. >> this city has to function, and i don't think any of you want to see this city not function. >> reporter: last week, the city of miami called an emergency budget meeting to consider the unthinkable-- cuts in pay and pension benefits for police and fire-rescue crews. >> when considering voting on cuts in benefits, i would ask the commissioners the following question: how much would you have to be paid in order to risk the thought of not seeing your children or loved ones again, or to save a complete stranger? >> and i am confident that the experiment that is being played on city of miami employees is neither just nor legal. >> reporter: faced with plugging
a $105 million budget hole by october 1, miami mayor tomas regalado says there are no easy options left. >> it's either, we go and take the money from what we have now in terms of workforce, or lay off 1,300 people. we're talking more than 100 cops, 50 or 60 firefighters, solid waste people, public works, you know... the works. >> reporter: in miami-dade county, revenues from property taxes are off by $30 billion. in neighboring broward county, where fort lauderdale is the largest city, property taxes are down $17 billion. taken together, that's $26,000 less in property taxes from every home and condo in the region. and that means more belt- tightening. workers in north miami beach will take a 10% pay cut and 10- day furloughs.
hialeah, a city of 200,000, will lay off 50 employees, and could cut worker pay by a third. in broward county, 10% of bus routes are on the chopping block. along with millions of dollars less, says county commissioner stacy ritter, for law enforcement and other key services. >> you feel like you're stuck between a rock and a hard place. do you raise taxes and give them the services they want, but recognize that in this economy, raising taxes is a really bad thing to do? or do you cut the service, keep the tax level what it is, and just recognize that they'll be mad at you because the parks and libraries aren't open when they want? there's no good answer and no way to please everybody in a time like this. jeff yastine, "nightly business report," miami. >> tom: our series continues tomorrow in new jersey, with a tale of two neighboring towns taking different approaches to control costs.
>> susie: goldman sachs faces a large fine in the united kingdom. the "financial times" is reporting the amount could reach $31 million. a formal announcement is expected tomorrow. the f.t. report says the claim follows a five-month investigation by the u.k.'s financial regulator into goldman's overseas business. it was launched in april, after the securities and exchange commission charged goldman with misleading investigators. the bank was fined $500 million by u.s. regulators, but the "u-
u.k. fine is not solely based on that controversial abacus transaction, but overall business practices in the u.k. >> tom: with financial taking the lead again, but this time it was on the upside. lots going on, so let's get everybody updated, susie, in tonight's "market focus." >> tom: investors were able to shrug off the federal reserve's regional economic assessment showing slower growth. it was back to the economically sensitive sectors of finance and industrial stocks, with each of those sector e.t.f.'s up 1%. investors shunned more defensive and dividend-paying utility stocks. that e.t.f. off 0.5%. on the weak side, visa was the biggest loser among s&p 500
stocks. analysts at bank of america merrill lynch worry visa may see its margins drop because of the financial reform law. shares of visa fell 4% on twice their usual volume. analysts are concerned that financial reform could increase pressure on visa to cut its processing fees. b. of a. merrill lynch cut its rating of the stock to "underperform." merger talk is a regular staple of the markets these days, with new and old rumors. the old rumor making a comeback today involved the "new york times." the stock was the biggest percentage gainer of the s&p 500, rallying 8% on four times usual volume. just last week, shares hit a 52- week low. the rumor making the rounds again is mexican billionaire carlos slim may be looking to buy the company. he already owns 7% and has loaned it $250 million. others making moves today including zymo-genetics. we told you about this deal last night. bristol-myers squibb is buying the bio-pharmaceutical maker for $9.75 per share in cash, a huge
premium from last night's closing price. this is a three month chart. the market may be looking for a higher offer with the stock closing at $9.76. computer software security firm symantec rallied more than 4% on twice its usual volume. it's been talked about as a potential merger candidate since intel's buyout of mcafee. the stock is at a one-month high. a couple of earnings, women's apparel retailer talbots was able to turn around a year ago loss, but it had a disappointing outlook. margins were better, as it easily beat earnings estimates even while sales fell. talbots raised its earnings guidance, but it lowered its sales growth forecast. and that was the disappointing feature. shares fell just over 1%, but traded lower earlier in the day. volume was five times what it normally is. shares have lost a third of
their value since that high in april. truck maker navistar is at its lowest price since march, falling 7% today. shares are down almost 30% since hitting a high in june. it easily beat estimates as profit margins widened. normally, a good combination. still, revenue growth wasn't as much as expected, and it dropped its sales forecast for the year. some military truck sales have been pushed out to its next fiscal year. while we're talking about things with motors, the outlooks for several auto part makers were cut by analysts at j.p. morgan. the auto suppliers think inventories will grow as auto sales growth slows. among those hit, tenneco fell 4.5%. the canadian-based magna dropped almost 4%. and dana was off more than 3.5%. volume was strong in all three stocks. while stocks have been trending higher since september began, some of that buying power likely is coming from bonds. the interest rate on the 10-year government bond has reversed course, at least for now. two weeks ago it hit its lowest level in more than a year and a
half, but it has crept back above 2.6% since, as investors sell bonds. and that's tonight's "market focus." >> susie: do you feel you spend too much time waiting for search results from google? if so, you're in luck. today, the search giant introduced google instant. it gives users suggested results before they're even done typing. google says the new technology can shave up to five seconds from every search. if you like google the way it is, you can disable the new
feature from your search page. google is the world's number one search engine, but is facing increased competition from microsoft's bing. >> tom: google is just one of the tech heavyweights that have been buying smaller companies in recent months. tonight's "street critique" guest thinks there are more deals to come. he's mark watson, c.e.o. and chief investment officer at keel asset management. >> tom: back with us temperature from the nasdaq. mark, nice to see you. welcome back to "nightly business report." >> thank you for having me back again. >> tom: why is it cheaper for these tech companies to buy their growth than build it organically. >> buying growth is a better way, particularly when you're cash rich. in an effort to really boost return on capital, it is probably the most certain way to improve returns longer term. >> tom: let's take a look at some newer ideas, beginning with the
business software firm, b.m.c., the ticker symbol, trading in the upper $30 range. why is this right for a takeout? >> we've owned behalf of our clients for sometime. in part because we thought there was fundamental growth just because of businesses outsourcing, etc. but longer term, it is still a single-digit topline grower. we thought it would be a beneficiary of the consolidation you're seeing elsewhere in the tech industry. >> tom: among oracle and s.a.p., do you think those are the key buyers? >> those, among others.